European Stocks Rally on Optimism About Economy

Date : 01/24/2020 @ 10:41AM
Source : Dow Jones News

European Stocks Rally on Optimism About Economy

By Avantika Chilkoti 

European stocks rose Friday as fresh economic data signaling a halt to the slowdown in the German manufacturing sector buoyed investors' sentiment.

The pan-continental Stoxx Europe 600 index gained 1.2%, while futures tied to the Dow Jones Industrial Average edged up 0.3%.

Fresh preliminary data for January on purchasing managers' indexes, which are closely watched measures of business activity, suggested that the manufacturing sector in the eurozone - and Germany, in particular - has fared better than the market had expected.

"The markets are reacting to the signs of bottoming in German manufacturing," said Mike Bell, global market strategist at J.P. Morgan Asset Management. "It's pretty key because the big question on everyone's mind has been: is there recession risk? And the most obvious risk there was a downturn in European manufacturing."

Within European equities, Ipsen plunged over 20% after the French biopharmaceutical company paused trials on a drug for ultrarare bone diseases, and said it's evaluating the implications on its 2022 financial outlook. Rémy Cointreau retreated 8.5% in Paris after the beverages maker reported disappointing sales.

Shares in Ericsson dropped 7.7% Friday after higher costs weighed on the telecommunications equipment company's latest earnings, and it said expenses will continue to rise this year.

Meanwhile, Carrefour rose almost 5% after the French retailer boosted its guidance for 2019 earnings, exceeding investors' expectations.

Over in Asia, Japan's Nikkei 225 benchmark closed up 0.1% and Hong Kong's Hang Seng finished the day up almost 0.2%. Chinese and Korean markets were closed for public holidays.

Later in the day, IHS Markit is scheduled to publish the latest PMI data for the U.S., which may show very modest slowdowns in the manufacturing and services sectors while remaining in expansion territory. .

U.S. companies including American Express are scheduled to report earnings.

Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com

 

(END) Dow Jones Newswires

January 24, 2020 05:26 ET (10:26 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.


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